Database

China has data residency laws that declare companies can store the data they collect only on servers in country.

China instituted a licensing system for online taxi companies which requires them to host user data on Chinese servers.

The transfer abroad of data containing state secrets is prohibited.

Population health information needs to be stored and processed within China. In addition, storage is not allowed overseas.

The "Notice to Urge Banking Financial Institutions to Protect Personal Financial Information" states that the processing of personal information collected by commercial banks must be stored, handled and analysed within the territory of China and such personal information is not allowed to be transferred overseas.

There are labour market tests. The post to be filled by the foreign service suppliers who is recruited by the employer shall be:
- a post of special need;
- a post that cannot be filled by any domestic candidate;
- a post that does not violate any government regulations.

China imposes strict limitations on companies that wish to offer VoIP services in the country. It requires a supplier to have a value-added service (VAS) license to provide VoIP service, and a basic telecommunications service license in order to interconnect VoIP services with the public switched telecommunications network.

China Telecom Corporation Limited (China Telecom), the incumbent, is a State-owned enterprise (SOE) providing basic, mobile and value added telecommunication services. In 2014, China Telecom had 52.6% market share of the fixed-line broadband market in China and was the third largest mobile services provider.

The telecommunication sector is not liberalized and there are various state-owned enterprises in different segments of the market. Furthermore, only in 2014, Chinese authorities decided for the price liberalization of telecommunication services.

The draft of proposed revisions to the Anti-unfair Competition Law circulated for public comment in 2016 includes only minor changes to the regulations on trade secrets. This can result in a restriction to digital trade as it is reported that offenders responsible of theft of trade secrets often operate with impunity in the country.

Under the National Intellectual Property Strategy, all local governments at province level have issued patent fund policies, which would allow patents to be used to enforce legal injunctions against foreign competition.

The Multi-level protection scheme (MLPS) introduced by the Ministry of Public Security prohibits government authorities with IT systems classified as "critical infrastructure" to purchase and incorporate foreign IT products. The MLPS requires all IT systems in China to be classified on different levels of security, from one to five (with the most sensitive systems designated as level 5).

MLPS regulations bar Chinese information systems graded level three and above from incorporating foreign products. Systems labeled as grade level three and above, for instance, must solely contain products developed by Chinese information security companies and their key components must bear Chinese intellectual property. Companies making systems labeled as grade level three and above must disclose product source codes, encryption keys, and other confidential business information.

To date, government agencies, firms in China’s financial sector, Chinese telecommunications companies, Chinese companies operating the domestic power grid, educational institutions, and hospitals in China have issued hundreds of request for proposals (RFPs) incorporating MLPS requirements. By incorporating level three requirements, many RFPs rule out the purchase of foreign products.

Historically, China reportedly has not had strict enforcement of IPRs. This happens despite the country has in place a number of laws prohibitng the reproduction and broadcasting of unauthorized digital content to the public through an information network without the copyright owner’s authorization laws.

Despite the legalization of software in government offices completed in January 2014, losses by software companies due to piracy at SOEs and other enterprises are reported to remain very high. Unlicensed software installation rate remains at 74%. Commercial value of unlicensed software is estimated to be around USD 8.8 billion.

Moreover, the industry reports that in 2013 the revenues from digital music sales in China were USD 65.4 million, compared to USD 108.3 million in South Korea, and USD 32.0 million in Thailand – a country with less than five percent of China’s population and a roughly equivalent per capita GDP.

In the Chinese national law, there is no clear fair use/fair dealing concept. Art. 22 of the Chinese Copyright Act enumerates a detailed list of limited exceptions to defend the charges of copyright infringement.